Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
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File No. 921067 |
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Author: B.G. Dodd |
April 14, 1992
CALU ANNUAL MEETING - MAY 11, 1992
Question 1
SOURCE OF INCOME
Special rules in the Income Tax Act (section 148) apply to determine the amount that is subject to tax where a policyholder disposes of an interest in a life insurance policy. Such amount is included in the policyholder's income under subdivision d of Division B of the Act (specifically paragraph 56(1)(j)), which encompasses income from "other sources". For various purposes under the Act, it is necessary to distinguish the source of income, that is whether income is derived from employment, business or property, taxable capital gains, or other sources.
What is the Department's position regarding the source of income from the disposition of a life insurance policy?
Department's Position
It is the Department's general view that for purposes of the Act the expression "income from property" should be given its ordinary meaning. Having regard to the wide scope of the definition of "property" in subsection 248(1) of the Act (which, in our view would include an interest in a life insurance policy), it is our opinion that "income from property" would, for the purposes of the Act include an amount required to be included in income under paragraph 56(1)(j) in respect of a disposition of an interest in a life insurance policy.
Financial Industries DivisionRulings Directorate
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